Australian Stock Market Report – Afternoon November 24, 2014

 Australian shares have surged on Monday with the ASX 200 Index up 1.1 per cent and closing above 5350pts. A surprise rate cut by China's central bank on Friday has led the mining and energy producing companies higher. This follows five consecutive days of weakness from local shares; the worst week in Australia since June 2013.

 Mining shares surged by 3.3 per cent with heavily sold Fortescue Metals (FMG) one of the strongest gainers. FMG jumped by 10.8 per cent following a near 12 per cent sell-off last week and a 3.2 per cent slump the week earlier. FMG remains one of the more heavily short-sold businesses on the local market. Short selling is the act of selling shares not currently owned by the seller expecting the stock to fall further.

 BHP Billiton (BHP) jumped by 3.8 per cent and held its briefing day. The miner said it will cut CAPEX (Capital Expenditure) to $14.2bn - around $600m less than its previous estimate. With the price of iron ore at a 5.5 year low and oil at a near four-year low, mining stocks have been under pressure.

 Paladin Energy (PDN) was in a trading halt today after announcing plans to raise around US$200m via a capital raising. The uranium miner has US$300m of debt due to be paid in November next year. PDN shares are down 18 per cent this calendar year, fell 54 per cent in 2013 and 24 per cent in 2012.

 Newly listed Pacific Smiles (PSQ) surged by 9.5 per cent today. The dental centre operator is worth around $300m on the local market.

 Banks ended slightly firmer with Westpac (WBC) the standout after rising by 0.8 per cent. WBC fell by 3.5 per cent last week after a 6.9 per cent surge in the previous week.

 Volume was average with 1.7bn shares traded worth $4.4bn. 527 stocks are up, 393 stocks fell and 359 are unchanged.

 The Australian dollar buys US$0.868, €0.70, ¥102.4 and £0.554.

 No major data was released in Australia or the region today. Markets in the region ended mostly firmer today while Japan was closed for a holiday.

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